Reversal of Fortune: How Early Choices Can Alter the Logic of Market-based Authority
Abstract: Non-state certification programs are becoming potential sources of global regulation for many social and environmental problems. Issuing standards for appropriate practices in forestry, agriculture and fisheries, among other sectors, they attempt to offer market benefits to those operations that voluntarily participate and pass an independent inspection audit. Though market demand is ostensibly a needed ingredient for programmatic success, developments in coffee, forest and fishery sectors reveal a counterintuitive pattern: where demand exists, programs have taken longer to globalize than in situations where demand is small, inconsistent, or non-existent. This talk presents an argument to explain this pattern. It suggests that when market demand exists for locally-oriented certification initiatives, interests in these efforts can entrench. Early-adopting companies will resist change due to the threat it poses for their niche-market advantage, while other actors will support local initiatives if they see a global program having distributional implications not in their favor. This resistance can reverse the fortune of early programs, permitting the entry of new competitor and complementary programs.